Why Isn't GM Doing Better?

It seems like it should be doing great, doesn't it? Unlike key competitors Toyota (NYSE: TM) and Ford (NYSE: F) , who had to weather huge crises on their own, GM famously got a big taxpayer-funded bailout check back in 2009.

Not only that, but GM's high-speed bankruptcy proceeding effectively accomplished years of restructuring in just a few weeks. A dozen unprofitable factories and the infrastructure supporting several unnecessary brands were just wiped off of the company's ledgers. Boom, gone.

And yet, for all of those advantages, GM's profits aren't yet what they should be -- and its stock price remains in the cellar.

So, what's the problem?

Still a work in progressActually, there are several problems, but they all boil down to this: GM isn't fixed yet. While the company's headline numbers look good -- a record profit last year, plenty of cash in the bank, low debt – there are an awful lot of problems remaining under the surface.

Before its swan dive into bankruptcy court, GM was arguably one of the most dysfunctional -- maybe the most dysfunctional -- big company in the world. Financial controls were slipshod or non-existent. Misaligned incentives led to turf wars and internal strife. Marketing was a mishmash of local programs and pet initiatives with often conflicting messages.

Worst of all, for a car company, GM's product-development system was broken. Regional disagreements and a culture that supported executive meddling in development programs led to a portfolio that had too many models, too many of which were late, flawed, or just plain uncompetitive with the world's best.

The bailout and bankruptcy did do a lot to put GM on a more competitive footing, but the deeper problems remained. GM was a company with a broken culture.

The good news is that CEO Dan Akerson is doing a lot of good things to fix those problems once and for all. The bad news is that progress is coming slowly, and there's still a lot of work to be done.

Small steps that could be big in timeIn a nutshell, Akerson and his key lieutenants are working to integrate GM's far-flung global fiefs along functional rather than regional lines -- in other words, to run the different parts of GM as a single, global company, with a single portfolio of products and all of its leaders aligned toward the same goals.

It sounds simple on paper. It's the way key rivals like Toyota and Volkswagen (OTC: VLKAY) operate. It's the template Ford CEO Alan Mulally followed as he remade his company. (Ford's turnaround plan is called "One Ford" for a reason.)

But it's proving complicated in practice. Still, progress is being made. Last year, GM product chief Mary Barra unveiled a long-term plan to consolidate GM's global product lines and streamline its new-car development process. Even though the product plan won't be fully realized until 2018, changes to the development process are already saving over a billion dollars a year.

Likewise, marketing chief Joel Ewanick has moved to remake the way the company -- one of the world's largest advertisers -- markets its products. For instance, Chevrolet's advertising is now done by one agency for the whole world, down from 70 -- many of whom didn't coordinate with one another. Ewanick's changes are expected to save GM $2 billion or more over the next five years and should, eventually, result in better marketing for the General.

But even if all goes according to plan, the company is still a few years away from the global efficiencies that are already being realized by competitors like Ford. The work is getting done, but that's why GM isn't doing better right now.

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